Employee turnover is inevitable, and while sometimes it can be useful, losing good performers costs you both directly and indirectly.

Studies have estimated direct turnover costs per employee to be 25-30% of an individual employee’s salary/benefits package, with hidden costs inflating that figure substantially. How much does turnover cost your company?

How to Estimate Turnover Costs

• SHRM, the Society for Human Resource Management, once estimated that it costs $3,500.00 to replace one $8.00 per hour employee when all costs — recruiting, interviewing, hiring, training, reduced productivity, etc., were considered. But SHRM’s estimate was the lowest of 17 nationally respected companies who calculate this cost!

• Do a quick calculation: Think of a job in your organization that has experienced high turnover, maybe supervisors. Estimate their annual average pay and the number of supervisors you lose annually. If their average annual pay is $40,000, multiply this by .125% (125% of their annual pay). The result? It costs $50,000 to replace just one supervisor. If you lose ten supervisors a year, you’re spending $500,000 in replacement costs just for supervisors.

Do These Numbers Seem Unbelievable?

Actual turnover costs are usually much higher than we think they are.

If you want to find out exactly how much turnover is costing your organization, find an online employee turnover calculator. Just remember that only tangible costs can be calculated on these sites. Intangible costs are just as real and sometimes much greater than quantifiable costs, but they are difficult if not impossible to measure.

Why Don’t More Companies See This as a Costly Problem?

Many companies don’t realize the true cost of turnover, which costs companies in both expertise and dollars, because they have never examined it. Here are four possible reasons:

1. No process is in place to tabulate the costs of turnover.

2. If they are measured, those costs are not reported to top management.

3. Employers think it’s an inescapable cost of doing business — but it’s not!

4. Costs are underestimated, so they don’t cause concern.

How Can You Measure Turnover Costs in Your Organization?

A comprehensive program measures the following costs:

• · Separation costs
• · Replacement costs
• · Training costs
• · Vacancy costs

Separation costs include:

• administrative functions related to termination
• separation/severance pay
• any increase in unemployment compensation.

Replacement costs include the cost of:

• attracting applicants
• interviews
• preemployment administrative expenses
• acquisition and dissemination of information.

Training costs include both formal and informal training costs. Vacancy costs include the net cost incurred due to increased overtime or temporary employees needed to complete the tasks of the vacant position.

How can you reduce turnover?

When turnover costs are unacceptably high, do an assessment. Find out who is leaving and why. Exit interviews can help you gain information. Then develop a retention program based on your findings.

As a leading staffing service in Middle Tennessee, we know how to reduce your turnover costs. Contact Wood today to learn more!

Like most things in life, you’ll get out of your job search what you put into it.  Those who work harder, have a positive attitude, persevere and go the extra mile are more likely to get what they want – period.

If you have the commitment to work hard, but need direction for your efforts, here are five things you can do to take charge of your job search today:

1.  Clarify your self-knowledge and your goals. Do you know exactly what you have to offer an employer?  Do you know exactly what you are looking for in a career?  Take the time to write down your specific skills, strengths, accomplishments and career goals.  If you know what you want, and what you bring to the table, it’s infinitely easier to focus your efforts, identify potential employers and find the job you want.

2.  Establish your network. Identify individuals in companies, industry organizations and professional associations who can provide insight into their employment needs.  When possible, schedule informational interviews to learn more about potential careers, as well as skills you may need to acquire to make yourself more employable.  Identify faculty, friends, business associates and relatives who can assist you with your job search.  Tell everyone you know that you’re looking for a job and ask them to refer you to potential employers.

3.  Get more organized. Place all of your job search materials, including: research on potential employers; listings of job postings to which you’ve responded; resume versions and cover letters; staffing services with whom you’ve registered; network lists, etc.  Use this binder to track your progress, plan follow-up, develop daily to-do lists or record other important information.

4.  Find a mentor. If you don’t have a trusted advisor who can help guide your job search efforts, you should get one.  To select a mentor, choose someone you know who:  has earned your respect; is successful in his or her career; will provide honest and effective feedback; will take an interest in your professional development; will support you in your career progression.  Meet with this person regularly to solicit advice, share your ups and downs, and get the feedback and support you need to keep going.

5.  Register with Wood Personnel. As a leading Middle Tennessee staffing and placement service, we specialize in connecting hard-working individuals with rewarding temporary, contract and direct employment opportunities.  If you are looking to:

• open new doors and create new connections;
• earn money while conducting a full-time job search;
• gain access to unadvertised opportunities;
• keep your skills sharp and your morale high…

…contact us today.